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Hodgsons recently sponsored a team at the recent 13th Annual UJIA Fuzion Football Tournament which took place in Manchester on Bank Holiday Monday 27th May 2013.

The event was well supported and was a great success with many boys and men from the Jewish community coming together to play at the highest standard whilst raising lots of money for an important cause.

The monies raised will be used by the UJIA "After School Enrichment Programme" in Merom HaGalil in Northern Israel to provide children with an afternoon of educational enrichment in Computer Studies, English, Art, Music, Communication and Torah enrichment as well as providing a hot meal to some of the children.

Below is a picture of the team we sponsored "Black Power" in the Hodgsons Kit

Hodgsons often support local and community projects. In addition to the recent UJIA event detailed above, we have also recently with colleagues from our associated company ClearDebt Limited been raising money in the BUPA Great Manchester Run for Stockport based charity, The Wellspring - a resource centre for the homeless and financially vulnerable.

Below is a picture of Matthew Bannon from Hodgsons prior to the Great Manchester Run

So
you have decided to set up a company and have hopefully sought advice on what
business structure to form. The next step is to write a business plan...or is
it?

As
you embark on a new business venture, you will be advised by many people to
prepare a business plan, as a matter of priority. . The business plan is the
strategy of how you intend to make your company a success. No matter what form
your business takes, you will be advised to prepare a business plan. As a firm
who acts for start-up companies of all shapes and sizes, there is good
reasoning for doing so. However, despite popular belief, a business plan doesn’t
necessarily have to be an intricate analysis of your business proposals.

A
business plan can take many different forms and vary in length.

For
example, a tradesperson looking to set up on his/her own business, as a sole trader,
will not see the benefits from spending any great length of time composing a
business plan. However, a tradesperson is more likely to benefit from a
document outlining a strategy as to how he/she expects the company to grow from
its humble beginnings.

A
business plan should highlight the target market of the company and the key
business objectives. It should also have a financial forecast, if only to allow
you the means to compare your position at the end of year one. A business plan
of this nature gives the new business owner a simple breakdown of the business
so he/she can focus on what they started the company for. The business plan
will also provide an invaluable benchmarking tool after the first year of trade,
to assess the company’s performance against the initial expectations.

On
the other hand, a start-up company that is looking for an investment from
venture capitalists or from a bank will be required to produce a detailed business
plan outlining every intricate detail of the proposed business. The same rule
applies in that it should contain details of key customers and the key business
objectives, but it should into further detail by explaining the purpose of the
company and provide a detailed analysis on products, competitors and the target
market. It should also contain a detailed cash flow forecast as well a three
year Income Statement (Profit & Loss) forecast. Other financial information,
such as asset valuations and security (where necessary), should be explored..
Perhaps most importantly, when raising finance for a start-up business, a
business plan should include an exit strategy on how and when the potential
investors can expect to see a return on their investment.

The Chancellor offered little in the way of support for
small businesses. The key small business announcement was in fact made on
Tuesday with the government backed ‘credit easing’ National Loan Guarantee
Scheme. However, only four banks have signed up to participate in
offering low interest rate loans to small business. Do you think this is
enough? Whilst the Banks are again urged to offer loans to small business, we
frequently hear from business owners that Banks are not willing to lend.

There are several ways in which a small business can raise
funds:

The more traditional method is to take out a loan with a Bank. On that loan, you
pay interest. This is something that the Banks have been reluctant to offer in
recent years. One potential way of successfully taking out a loan is to obtain
a guaranteed loan, secured against an asset you own. However, with the current
decline in house prices, this can prove difficult for many small business
owners as the security may no longer be available with your property.

An alternative method, that is becoming increasingly common,
is to offer the Bank a personal guarantee against the loan.
This provides the Bank with that comfort that you have personally guaranteed to
repay the loan. If you are unable to provide a personal guarantee yourself, the
bank may accept a personal guarantee from a family member.

Another possibility is to take out an agreed overdraft with your Bank.
This method can be more cost effective than taking out a loan from a
Bank, provided you stay within your agreed overdraft.

The final way of raising finance through borrowing is by lending money from family or friends.
This is often the least expensive option, as the interest rate is likely to be
less than what a Bank would offer. However, be sure to pay the loan back in the
agreed timescale, at the agreed interest rate, or you may find yourself in disputes
with family members or close friends.

The methods outlined above are all forms of lending which
create debt in the company. Therefore, before taking such a step, you should
speak to an independent financial expert for further advice and information

There are of course other ways of raising funds for your small
business that don’t create debt in the company. For example, if you obtain an investment
from a venture capitalist, your
ownership would be diluted, but you would have a debt. Whilst you would have to share your profits
with the investor, there may not be a requirement to repay the investment.

If you decided to set up a limited company, you may be able to get investments from family or
friends and in return, offer them shares in the company.. This would again
dilute your shareholding, but would not create debt in the company.

Whilst certain criteria would need to be met, subject to you
being eligible, you may be able to receive a government grant or sponsorship. This form of funding is not repayable
and is something you should consider.

Finally, if your cash flow is tight, there are other ways of
obtaining finance such as invoice
finance. This can take the form of invoice discounting or factoring and
both can be beneficial to a business experiencing short term cash flow
problems.

As you read this blog, you will no doubt be hearing
different views on whether the Banks are lending money to small businesses.
Whichever view is correct; there are a number of alternatives which you should
consider if you require finance for a business.

If you wish to discuss your financing options in more
detail, please do not hesitate to contact Hodgsons for further advice.

I frequently
meet with prospective clients who are seeking advice on whether to start a
company as a sole trader or as a limited company. There is no simple answer and
this will clearly depend on the specifics of your proposed company. The purpose
of this blog is to assist you in making an informed decision.

There are
several issues which you should consider before deciding which corporate
structure to choose. They include but are not limited to the following:

Legal Status

As a sole trader,
you are the business and owner and therefore have full liability for the debts
of the company. With a limited company, the business is a separate legal entity.
As such, you are not personally liable for the debts of the company

Tax

As a sole trader,
you would be taxed on your trading income throughout the year. This trading
income is taxed as standard Income Tax. You would also pay Class 2 and Class 4
National Insurance Contributions (“NIC”), rather than class 1 NIC, which is
deducted at source if you were an employee. As a sole trader, you would also be
required to complete a self-assessment tax return each year for your Income Tax
and NIC’s.

As a
director of a limited company, it differs in that you would have to pay
Corporation Tax on the company’s taxable profits. Employees are subject to PAYE
and Class 1 NIC’s on their earnings from employment. Further, if you receive additional
income by way of a dividend, that dividend would also be taxed. There are of course tax benefits to being an owner
of a limited company. By way of example, you can control how you receive your
salary and ensure that it is paid to you in the most tax efficient manner. There
are also some tax advantages to being a sole trader. They include gaining
capital allowances for certain company expenditures which may reduce your
taxable income. This is a complex area and we would be pleased to advise you further
in this regard.

Accounting Records

Once your
company has been established, we would strongly advise you to keep accounting
records. This is the best way to monitor the performance of your company.

As a director
of a limited company, you would be required to prepare annual accounts under
the provisions of the Companies Act which are then required by HMRC for
Corporation Tax returns.

However, as
a sole trader you would only be required to prepare basic annual accounts. You may
decide to submit these with your self-assessment return, but there is no
requirement to do so.

General

With regards
to the administration and management of the company, as a sole trader, you can
do what you deem to be appropriate. As a company director, you are however responsible
for adhering to company administration according to statutory regulations with regard
to the limited company accounts, statutory books and management. In essence,
the duties imposed on a director are more formal than a sole trader and
shareholders/directors often find the requirements to be fairly onerous. This
is something we would be able to assist you with to ease the burden.

Other Practical Considerations

There are of
course many more considerations when deciding whether to start a company as a
sole trader or a limited company. Such considerations include how the expenses
are going to be dealt with and whether you will want to purchase a company car.
Purchasing a company can often bestow a tax saving, but this depends on the
business structure chosen. Furthermore, substantial tax savings may be
available as the result of incorporation from a sole trader to a limited
company. This is something that you should consider as your business grows.

Conclusion

If you are
thinking of setting up a business on a small scale, we would recommend setting
up a sole trader business. This is to enable you to concentrate on the growth
of your business and avoid dealing with the onerous demands that are required
with a limited company. However, this decision requires careful consideration
and we would recommend that you speak to a specialist accountant or financial
advisor before making any final decisions.

Another football club has entered into Administration with Plymouth Argyle appointing Brendon Guilfoyle of The P & A Partnership as Administrator after an eventful morning at the High Court.

A court hearing was scheduled for 10.30 this morning were H M Revenue and Customs applied to the court to appoint as Administrator ASAP. After a little bit of legal toing and froing and after a change of Judge due to a conflict of interest the directors and shareholder met and appointed Mr Guilfoyle as Administrator.

H M Revenue and Customs had also tried to apply for a winding up petition but this was turned down by the Judge who advised them to challenged the football creditor rule which they intend to do.

Mr Guilfoyle has issued a statement in which he states that he is looking to find a buyer for the club before the 17 March 2011 and he has already received interest from a number of parties. He is also going to sit down with Plymouth City Council on Monday 7 March 2011 to plan the survival of the club.

But how has this come to happen with Plymouth who were only taken over by the New World Partnership in 2009 and were heavily involved in the the failed World Cup 2018 bid in which they had hoped to be a chosen venue.

Reason for the failure include the lack of fund being invested by there Japanese Shareholders who had continually promised and failed to invest funds and the estimated loss of £3million in turnover when the club was relegated from the Championship last season

Since then the club has had to fight off several winding up petition from H M Revenue & Customs the most recent being in February this year in which Peter Risdale the former Chairman of Leeds United and Cardiff City and football consultant employed by the board claimed that £2 to 5 million would be required just for Argyle to see out the remainder of this season. (This is about the same amount of the alleged payoff received by Roy Hodgson when he was sacked by Liverpool)

So what is going to come out of todays event

Are H M Revenue and Customs going to continue with the aggressive approach to force football clubs into Administration?

Are they going to challenge the football creditor rule and should the Football Association and Football League be worried?